Aug 5 2007
Tata Steel Limited and Riversdale Mining Limited, a company listed in Australian Stock Exchange announced today that they have entered into a Memorandum of Understanding ("MOU"), whereby Tata Steel will become a strategic investor in Riversdale's Mozambique Coal Project by acquiring a 35% stake in it for a sum of A$100 million. The Mozambique Coal Project includes the coal tenements of premium hard coking coal in Benga and Tete, located in the Tete province in Mozambique, which are fully owned by Riversdale through its subsidiary. The Benga and Tete tenements together cover an area of 24,960 hectares. The Riversdale management expects that the potential mineralisation of the area will be substantially high. The MOU contemplates the relationship between Riversdale and Tata Steel to develop the project. Riversdale is presently conducting a scoping study which is likely to be completed in August 2007. The Definitive Agreements are expected to be finalised and executed by November 30 2007.
The hard coking coal derived from this project will be supplied to the Corus facilities in the UK and Europe and also to the Company's enhanced requirement in India in the future.
Mr. B Muthuraman, Managing Director, Tata Steel said, "The Memorandum of Understanding with Riversdale is in the Tata Steel's stated strategy of progressing towards raw material security for its global business. This partnership gives Tata Steel an opportunity to jointly explore part of a large coal basin which could prove to be a potential source to meet part of the raw material requirement and enhance the long term competitiveness of the global operations.
Mr. Michael O'Keeffe, The CEO and Chairman of Riversdale said, "The Memorandum of Understanding with Tata Steel is a decisive corporate event for Riversdale and is a definitive recognition of the Moatize Coal Basin as a significant new source of supply of hard coking coal products for the global steel industry. The MOU culminates a lengthy and thorough search for a strong strategic investor. Tata Steel is one of the most dynamic steel companies in the world. Throughout their long history, they have demonstrated consistent ability to thrive across many market cycles. They are an ideal strategic partner for Riversdale, and offer our shareholders the most efficient way to realize value from the development of Riversdale's world class projects."
The completion of the transactions contemplated by the MOU is subject to completion of due diligence, definitive agreements, and Board approval of both companies and regulatory approvals.